Module 9

• Bancassurance - an arrangement between a bank and an insurance company allowing the insurance company to sell its products to the bank's client base.
• Bancassurance - can be profitable for both companies.
• banks - provide the distribution channel
• insurance companies - remain product developers
• banks - they can earn extra income by providing their platform to insurance companies.
• more-rounded services - will help banks to enhance customer loyalty
• insurance companies - they can achieve more sales through the distribution network of banks.
• insurance companies - have access to customers of partnered banks
• customer's financial needs can be satisfied through bancassurance
• banks - can find and promote the most suitable life insurance for customers based on their credit and personal needs.
• bancassurance - requires both banks and insurance companies to work together.
• insurance companies - can provide sales training for bank employees.
• full integration model - this model entails a full integration of banking and insurance services.
• joint venture model - the bank participates in product distribution design.
• strategic alliance model - there os a tie-up between a bank and an insurance company.
• financial services group - all the facilities of financial activities are under one roof.
• joint venture model - the insurer loses control of distribution and the bank may be able to realize higher profitabilioty as an insurance distributor rather than a producer.
• full integration model - bank sells the insurance products under its brand acting as a provider of financial solutions matching customer needs.
• strategic alliance model - the bank only markets the products of the insurance company
• strategic alliance model - except for marketing the products, no other insurance functions are carried out by the bank.
• full integration model - bank controls sales and insurer service levels including approach to claims.
• financial services group - fill integration of system; low-cost model
• financial services group - the insurer is ill-equipped to exercise control of distribution
• financial services group - may be able to realize higher profitability as an insurance distributor rather than a producer.
• right products - it provides the end users with a customized insurance solution.
• right time - at a location, they already are for their financial needs---their banks.
• banks - have the data and documentation of customers
• banks - being the front dealing with customers, handle renewals as well, making the transaction even more hassle-free
• banks - sit on mounds of customer data
• Advantages of Bancassurance Models to Customers (1) One-stop shop for all financial needs (2) Improved application and policy processing time (3) Ease of Renewals (4) Trust (5) Expert Advice.
• Advantages to Banks (1) Diversification of Customer Portfolio (2) Improved profitability and non-interest fee income (3) Customer loyalty and retention (4) Cost-effective use of existing resources (5) Increased customer lifetime value.
• Advantages to Insurance Companies (1) Piggybacking on bank's high market penetration rate (2) relevant offer generation and customer engagement (3) Increased premium turnover (4) Increased operation efficiency and reduced costs (5) improved turnaround times